PT Matahari Putra Prima, an Indonesia-based retailer that offers clothes, cosmetics, books, household items, accessories, food and other consumer goods, is expanding its presence outside Java.

In 2012, the company intends to set up at least 17 new stores of modern supermarket Hypermart, which is complimented by a health store – Boston.

Matahari director and corporate communication head Danny Konjongian told Jakarta Post that eastern Indonesia has seen faster growth in retail businesses last year, at about 11% compared to the national average of 8.5%.

"The market in the retail-food industry in Indonesia is worth around Rp 53 billion, in which 89 percent is dominated by traditional retailers, while the remaining 11 percent is held by modern food-retail business," Danny said.

"Meanwhile, hypermarkets such as Carrefour, MPPA’s Hypermart, Giant and Lotte, are representing only about US$2.5 billion of the total market.

"This is why we are very expansive, particularly in eastern Indonesia, in which we saw faster growth in retail businesses in the last few years."

Danny said the first new Hypermart will open in Papua sometime in June or July, and added that majority of the new stores will be located in the eastern part of the nation.

Each Hypermart needs around IDR20bn ($2.18m) in investment and the retailer has set aside up to IDR1 trillion ($109m) in capital expenditure to finance this year’s expansion.

Matahari, which reaped IDR9.3 trillion ($1.01bn) in 2011, currently operates 68 Hypermarts. The firm also plans to open one new Foodmart this year.

Matahari Group, a multi-format modern retailer with core retail businesses in fashion and household groceries businesses, runs Matahari Department Stores, Hypermart and Foodmart.